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For the drinking water supply community, one of the more problematic issues associated with chemical monitoring under the Safe Drinking Water Act (SDWA) is the establishment of meaningful reporting limits. Historically, reporting limits have been poorly defined by the regulations and have been set arbitrarily and inconsistently. To address this issue, the California Division of Drinking Water and Environmental Management, the state primacy agency for SDWA enforcement, formed the Reporting Limit Workgroup to investigate approaches for determining reporting limits and to develop a procedure for setting reporting limits that are clearly defined and based on objective and reproducible data. In a voluntary study, drinking water laboratories accredited by the state received a series of prepared solutions containing analytes of interest. Only analytical methods approved by the US Environmental Protection Agency for SDWA compliance were used. Over the years, considerable debate has centered on the best approach to setting reporting limits. Much of these data have come from individual laboratories or limited numbers of analytes. This study examined results from a large number of laboratories and analytes as well as all approved methods, providing a more empirically based assessment of different approaches to setting reporting limits. According to study findings, the optimum approach to setting reporting limits considers the number or percentage of laboratories that can produce results that meet the measurement quality objectives of the data user (i.e., the regulators) rather than the average performance of all laboratories or other aggregate measures. When reporting, limits are set using the procedures described here, they are more reflective of actual laboratory capability and capacity. Includes 16 references, tables, figures.